Invest
Fairness has been sacrificed at the altar of technicality: ASIC
The corporate regulator has blasted some sections of the financial services sector’s tendency to revert to technical legality to bypass the fundamental issue of consumer fairness.
Fairness has been sacrificed at the altar of technicality: ASIC
The corporate regulator has blasted some sections of the financial services sector’s tendency to revert to technical legality to bypass the fundamental issue of consumer fairness.
Providing a regulatory update at a Pritchitt Partners lunch in Melbourne on Tuesday, the deputy chair of the Australian Securities and Investments Commission (ASIC), Peter Kell, said financial services firms have been using tenuous connections to legality as a means of sidestepping customer fairness.
“The royal commission is bringing welcome additional transparency to the problems of misconduct in the financial services sector, including consideration of the potential origins of this misconduct,” he said.
“The royal commission is also highlighting the importance of community expectations and community standards. At ASIC, we have seen that an approach from financial services firms based on minimal or technical compliance with the law has, at times, been allowed to override fairness and good customer outcomes.
“This can only undermine trust.”
Mr Kell said the treatment of some small business borrowers and poor claims decisions in life insurance are examples. He said the industry needs to place greater weight on community expectations of fairness, and provide more data on “actual customer outcomes”.
As it stands, publicly available data on life insurance claims outcomes is hard to come by, despite being a key performance measure. Likewise, it was difficult to “see the full picture of the advice industry” and individual advisers’ movements and qualifications, prior to the Financial Advisers Register.
Mr Kell explained, “One of the key sources of community and consumer frustration with the financial services sector is the divergence between what is promised and what is delivered over time. If we can improve transparency around outcomes, this will help with accountability and trust.”
Undue reliance on individual disclosure at the point of sale has been provided as a solution, but in reality is often delivered in a way that makes it difficult to compare, he said. Further, there has also been too much emphasis on the “promise” of the product and not enough information on the actual outcomes.
“This has clearly not worked in many areas, or at least not been sufficient on its own. Disclosure of conflicts of interest on this basis, for example, has not driven better conduct,” Mr Kell said.
He said the industry needs readily available and recurrent data on how products and services are performing and changing over time.
“This is not just investment returns, but issues such as how complaints are dealt with,” Mr Kell said.
“The community expects that the services you provide are beneficial, have value and are focused on good outcomes. And they expect that this will be more than just marketing hype.”
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
